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Nightly Business Report

News/Business. (2013) New. (CC) (Stereo)

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PBS

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00:30:00

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G

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San Francisco, CA, USA

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Comcast Cable

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Channel 19 (153 MHz)

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mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
720

PIXEL HEIGHT
480

TOPIC FREQUENCY

Obama 6, S&p 6, Bobbi Brown 4, U.s. 4, Washington 3, Cisco 3, Gregg Greenberg 2, New York 2, Joey Ramone 2, Darren Gersh 2, Ruben Ramirez 2, G.e. 2, Eric Schurenberg 1, Stratasys 1, Cbs 1, Mastercard 1, Ramones 1, America 1, Citigroup 1, London 1,
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  PBS    Nightly Business Report    News/Business.   
   (2013) New. (CC) (Stereo)  

    February 13, 2013
    6:30 - 7:00pm PST  

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captioning sponsored by wpbt >> this is n.b.r. >> susie: good evening everyone. i'm susie gharib. tom is off tonight. $9 an hour, the president says that's what it will take to lift working americans above the poverty line. but can his state of the union plan work? >> susie: tech titan cisco reports strong earnings and record revenues, but the company's c.e.o. says the tough economy is dragging down results. and alamos gold, goes digging for investors, on wall street. it made its trading debut here at the big board. that and more tonight on "n.b.r."! >> susie: everyone from american workers, to business leaders, and investors had a strong opinion today about the minimum wage. they were reacting to president obama's proposal to increase the
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minimum wage to $9 an hour, up from $7.25. the plan was unveiled in the president's state of the union address last night. and today it re-kindled a nation-wide debate of whether the measure would help or hurt workers and businesses, and the economy. darren gersh reports. >> reporter: supporters of a higher minimum wage increase point to studies showing little impact on employment after the pay at the bottom of the job market goes up. one reason is that employers may actually come out ahead when they are forced to pay workers more. productivity and job satisfaction improve and turnover falls. >> so employers get to reap the benefits of lower hiring and firing costs, lower turnover costs. hiring and firing is actually very expensive to companies, so if you pay people a little higher wage, they have more job stability. that's actually good for everyone. >> reporter: of course, we're talking about economics, which means there are other studies that show a minimum wage hike is most likely to hurt those who
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need it most. critics point to research showing the minimum wage will benefit teenagers and college students who work part time, but aren't poor. and it will hurt workers who need to work their way up. >> most of the people who earn the minimum wage today will be earning more than that a year from now. the danger of a minimum wage increase is that it reduces the availability of these entry level positions in effect sawing off the bottom rung of a lot of less-skilled workers career ladders. >> reporter: so who's right? the answer is we're not sure. some studies show increasing the minimum wage will have no impact or a positive impact. but more studies turn up a modest negative. >> there's also a question of, if there is even a small amount of employment loss, who bears that loss? is it the middle class college students or is it poor adults? and i would be more nervous if it was the poor adults. >> reporter: so, if the evidence is mixed, changing the minimum wage is a bit of a risk. and for some, that's a reason to hold off.
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>> i'm more comfortable doing it in a stronger labor market. more comfortable doing it if a fair amount of time has elapsed since the last time we did it. i would be comfortable waiting a few more years before doing this again, and then i would do it. >> reporter: indexing the minimum wage to inflation would eliminate the need for congress to continually debate the issue. the president favors that, but republicans think it doesn't make sense to put a bad idea on autopilot. darren gersh, "n.b.r.," washington. >> susie: president obama also used last night's speech to push for an increase in cyber security. his proposal set the stage for a fresh debate on the urgency for cyber-security. the president made the case that america's power grid, financial institutions and air traffic control systems, are vulnerable to attacks. so he's calling on congress to pass legislation to give the u.s. government the capacity it needs to secure our networks. the president also issued an executive order, to create cyber security standards for u.s. businesses, and for the
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government to share more information about threats. but cyber security experts, say while that sounds easy, it's hard to do. >> you can't just inform one party necessarily, you might really have an obligation as a government to inform every player in a sector, and then of course that's a high bar, because you're sharing the information with a lot of people which increases the likelihood that it might get out back into the wrong hands. >> susie: beckstrom says the threat of cyber attack or manipulation to critical infrastructure like the power grid and transportation systems is much worse than most people expect. from the "ramones" to the "clash," still ahead, investing in punk rock history, and the prices might surprise you. after the closing bell on wall street today, record revenues for cisco systems: $12.1 billion. that gave the networking equipment maker earnings of $0.51 a share, in its fiscal
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second quarter, the results were $0.03 ahead of estimates. on the earnings call with investors, cisco predicted earnings for the current quarter at $0.49 a share, right in line with analyst estimates. and c.e.o. john chambers said the company will get more active on acquisitions. on wall street today, blue chip stocks lost momentum, pulling back from their five-year highs. investors were discouraged by a report showing consumer are spending less, we'll have more on that in a moment. by the closing bell, the dow was off 35 points, the nasdaq rose 10, and the s&p added almost a point. our guest tonight says worries about the gridlock in washington, is also weighing on investors. he's robert doll, chief equity strategist at nuveen asset management. >> susie: bob, let me start by first getting your take on president obama's state of the union address last night.
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was there anything that he said that makes you want to change your investment strategy or change your thinking about investing in the stock market? >> not a whole lot, susie. as you know, most of what the president said was also said in some way in hi inauguration speech, and other speeches he made. there was a long laundry list of a lot of things we would all like to do, but they also cost money, and the republicans are basically saying we're not giving you anymore money at this point in time. so most of it is dead on arrival. i would say that the focus in d.c. these days, of course, is on the issue related to sequesteration. and the president said, we've got some things to talk about with the republicans, but most observers, and i would agree, are thinking we'll hit the sequester march 1, but hopefully not for long.
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>> susie: if there is s sequestration, what does that mean for the economy? >> i think most people are already figuring some sequestration for several months in their outlook. we know it is an across the board cut and it hits defense pretty hard. if it is only for a few months, the world won't end. if it lasts longer than that, we need to talk. it is not help to an economy that is muddling through to begin with, as you know. >> susie: you know, there is a sense of complacency about these washington deadlines, that somehow they'll work through it and we won't have that problem on march 1st. there were some reassuring words from president obama last night. what do you think will really happen coming march 1st? >> i think the march 1st sequestration will hit, and that means there will be across the board fiscal
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cuts. and massive tax increases could have taken place, but sequestration won't put us into a recession, but it takes a little of the edge off for things starting to look a little better in our economy. >> susie: you mentioned a moment ago about our economy muddling through and that was one of your 10 predictions back in january and you talked about the stock market grinding higher. are you making any changes on those predictions? >> not really, susie. the economy -- it is only february -- is muddling through. that's about all we can say for it. the stock market in january galloped higher. it didn't grind higher. i think that could have been the best month of the year, not that we won't see higher highs from here. in fact, our view is we'll hit a new all-time high. but it is not going to be a straight line. bull markets don't go straight up. we'll have pauses -- hopefully pauses that refresh. as you know, right now we're in a funky period for the market.
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we're kind of going sideways, and volatility has gone way down, which usually means some complacency has crept in. >> susie: you had a prediction of 1550 on the s&p 500. we're not too far off from that. you say we're in a funky mood right now. white does that mean for the averages and what does it mean for the investors? >> investors have to recognize that the markets run hard, not just year-to-date but since the fall. like you and me, when we run hard, we need a rest. i think that is what is happening. we may get a little pullback somewhere along the line. there is so many people with a lot of cash on the sidelines, waiting to put it to work. any pullback, they'll be back in. so i would use dips, if we get any, to enter in because we think the economy is muddling through and that is good enough for the stock market. >> susie: buying on the dip, we'll remember that. bob doll, chief equity
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strategist at nuveen asset management. on capitol hill today, jack lew, president obama's nominee for treasury secretary, urged lawmakers to avoid the sequester from kicking in. he said those steep automatic spending cuts set to take effect in just two weeks, could be damaging to the economy. during his confirmation hearing at the senate finance committee today, lew said those cuts, coming march first would impose quote self-inflicted wounds on economic expansion. some senators were more interested in investments lew made in the cayman islands while
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working at citigroup, several years ago. >> i was not involved in setting up the fund. >> did you know at the time it was cayman? >> at the time i invested, i was aware that it was an international fund investing in emerging markets. i knew that much of the personnel was based in london. i actually didn't know at the time what the address of the partnership was. >> susie: lew said he received no tax benefit on that investment, and sold it at a loss. despite the tough questions, it is expected lew will win senate backing. >> susie: americans barely increased their spending last month, partly because of higher
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taxes, and energy prices. retail sales edged up just 0.1% in january. that's much less than in december. should investors be concerned about weak consumer spending? erika miller reports. >> reporter: consumer spending is watched closely, because it accounts for roughly 70% of economic growth. unfortunately, the latest reading on retail sales is not encouraging. the measley 0.1% gain in january was the smallest increase in three months. even core retail sales, which strips out volatile categories, ticked up just 0.2%. consumers have been cutting back on purchases of cars, clothing, and furniture. but sales did rise at home- improvement stores, gas stations and online retailers. part of the problem is rising prices at the pump. regular unleaded has soared $0.30 a gallon, on average nationwide, in the past month. but more importantly, nearly every working american is taking
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home less pay this year because of higher payroll taxes. mastercard advisors says there's been a drop in spending across all income levels. >> it's off a cliff. interesting enough, you actually saw the impact of when people got that first paycheck on the 15th. it was accelerated into the end of the month, when they really had to pay their bills and all of a sudden said overall, my income is down. >> reporter: quinlan says consumers are dining out, less at fancy restaurants, and more at fast casual chains. they're trading down from high end department stores, to low end ones. americans are also shopping at more discount and dollar stores. but it's important to keep perspective. retail sales data tends to be volatile, and many economists are still confident there will be modest economic growth in the first quarter. >> we're looking for consumer spending to be one of the main drivers in this quarter. the one thing that will always get an economist on wall street in trouble is underestimating the u.s. consumer. and i try never to do that. if people have jobs, they are going to spend money.
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>> reporter: if the housing market continues to recover, that could also encourage spending, and don't discount the impact of a rising stock market. valentines day and presidents day coming up, but those aren't major spending holidays. analysts say the best hope for retailers is that the weather warms up, giving consumers a reason to go out and spend. erika miller, "n.b.r.," new york. >> susie: those disappointing retail numbers weighed on blue chips today here at the big board. perhaps some investors are even giving up stocks for lent, as there was continued talk of a possible market correction. the s&p 500 index flip-flopped between positive and negative territory for much of the session. it briefly touched its highest intra-day level in more than five years, and ultimately eked out a tiny gain. on the sector front, industrials were best-in-class, rising 0.5%. materials tacked on a modest gain. shares of mcdonalds took a bite out of the blue-chip index today. while there was no specific news
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on the fast-food giant, there was speculation president obama's call for a higher federal minimum wage weighed on the stock. mcdonald shares fell 1% to close at $94, and the company was the largest percent decliner in the dow. the president's shout-out last night to 3-d printing companies gave some of their stocks a nice boost today. he said 3-d printing has the "potential to revolutionize" the way things are made. 3d systems added 4%, ex-one gained nearly 2% and stratasys saw a more modest rise of about 0.5%. meanwhile, general electric was the dow's biggest gainer today. g.e. announced late yesterday it would sell the rest of its nbc universal stake to comcast for nearly $17 billion. g.e. gained almost 4% to close at $23.39, comcast stock rose 3% to $40.13 a share, earlier in the session it hit $42, its highest level since 1999. a trio of tech names helped to underpin the nasdaq today, although volume remained on the light side. amazon added 4% to close at almost $270.
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the online giant unveiled an expanded content agreement with cbs. the deal adds shows like "everyone loves raymond" and "united states of tara" to amazon's instant video lineup. netflix gained almost 5% as j.p. morgan upped its price target to $205 from $180. the investment bank said it looks like the company's first original series "house of cards" is off to a strong start. shares of groupon rose more than 5%, after a sterne agee analyst raised his rating to a "buy" from neutral. he set a $9 price target for the much bruised stock, citing conviction the company can evolve its current business. we saw a chilling drop in cliffs natural resources. shares tumbled 20% after the company posted a loss, and stunned investors by slashing its dividend. the miner is grappling with lower iron ore prices and rising costs. today's drop drove the stock
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down to a two-month low. then after the bell, we also got earnings news from zillow. the real estate website posted a 73% jump in quarterly revenue as it added more subscribers. the shares gained 8% in the regular session, and tacked on another 10% after-hours. this follows strong fourth quarter results yesterday from rival trulia. today, its stock jumped more than 20%. and finally, four of the five most active exchange traded products rose in today's trading. and that's tonight's "market focus." >> susie: gold ended today's >> susie: gold ended today's
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session at $1,640 an ounce, it hasn't been that low since august. the move south, comes ahead of this weekend's g-20 meeting in moscow. investors are watching for hints at currency policy, which could be a clue to whether they should be buying or selling gold. but as ruben ramirez reports no matter what comes out of this weekend's meetings, it looks like gold prices will trend higher this year. >> reporter: gold prices may be taking a breather this week but don't expect that to last for long. >> the environment hasn't changed for gold. i think what were looking for at the moment is a specific catalyst that drives gold to the next level. >> reporter: rhind is keeping an eye on loose monetary policy around the globe, he's thinks those policies could cause currencies to weaken, making gold an attractive alternative. he's also watching gold supplies, which are currently tight. s&p capital i.q. thinks the precious metal could rise 15% this year, ending 2013 just below $2,000 an ounce.
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>> price forecasts like that could benefit gold miners, toronto-based alamos gold went public today, on the new york stock exchange. c.e.o. john mcclusky says demand, drove today's listing on the big board. >> it's an indication that we've grown to a stage where we could justify listing our symbol down here and actually command some investor attention. >> reporter: there are close to 80 small gold miners, each pumping out around 200,000 ounces of gold a year, and mcclusky says that makes the sector ripe for consolidation. >> if you can get three or four mines operating under the same roof, effectively, your ability to predict and control the outcomes of your quarterly forecasts you're much more able to do that. >> reporter: just last month alamos offered to buy aurizon mines, if the deal goes through it would give alamos more mines in northwestern canada, and
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bring capacity close to 350,000 ounces a year. >> ultimately i think what investors are going to demand are safer companies with steady, long term production and if you're a single mine producer that's very tough to achieve. >> reporter: while the outlook for gold this year is shiny, if the global economy brightens, analysts say investors could rotate out of gold and goldmining stocks, and pile into metals with more industrial uses, like silver and platinum. ruben ramirez, "n.b.r.," new york. >> susie: monday on "n.b.r.," the markets are closed for presidents' day, so we bring you "conscious capital." an "n.b.r." special edition, looking at philanthropic spending and investing in others. our "nbr-u" partners at harvard have more on the web, just head to: www.nbr.com. for a look at what makes people give to charity, you'll find it under the "nbr-u" tab. and tomorrow on "n.b.r." does congress have a plan to prevent the sequester? we'll talk to michigan senator
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debbie stabenow. and we'll get a check-up on the health of the u.s. job market, with the latest employment numbers. >> susie: when it comes to starting a business, successful entrepreneurs often take a "fake it 'til you make it" attitude. here to explain, eric schurenberg, editor-in-chief at inc magazine. >> at inc. we love to tell the stories of entrepreneurs who land their first big job by making their start-up look bigger than it is. bobbi brown, who built a make-up empire out of nothing, got her first sale at bergdorfs by letting the buyers there think she had a deal with crosstown rival saks. she didn't have any such thing, really, but the hint of competition sealed the deal. its not bluffing, brown later rationalized to inc., it's thinking on your feet. well, whatever you call it: thinking on your feet, creative embellishment, fake it 'til you make it-you love it when its done by scrappy entrepreneurs. now compare that to what you read about faking it by big
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companies-just to pick one from the news, standard & poors. analysts there rated junk mortgage securities as if they were perfectly safe, even though, according to the government, they knew better. if that's true, then, s&p was just doing what bobbi brown did, right, stretching the truth to make a little money? well, no. the difference is a matter of trust. people trusted s&p to give honest evaluations of securities. trust is what they sell. bobbi brown sells facial paint. we'd feel differently about bobbi brown if she sold makeup with toxic ingredients to bergdorfs, but that's what wall street did in the years leading up to the crisis. after you make it, you've gotta stop faking it. wall street couldn't. and the economy paid the price. i'm eric schurenberg. >> hey! ho! lets go bid on some >> susie: buying
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collectibles once owned by punk legends could be a smart investment now that their audience is nore interested in financial security than anarchy. gregg greenberg reports. >> hey! ho! lets go bid on some pricey punk rock memorabilia: things from the ramones, the sex pistols, the clash, they were only around for a limited amount of time but now they are icons, titans of the music industry. r.r. auction is putting the joey ramone collection up for sale. online bidding for the late punk icons personal belongings, as well as other rock collectibles, starts february 14 and ends february 21. >> we have joey ramones passport which is incredible. anything that you can get that's an official document like this has extreme value. it has all the tour stops that the ramones made from 1986 to 1996. so something like this goes for
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the mid-five figures. >> and you also have his glasses. now he had very poor eyesight so you cant wear them around, but you can show them to your friends. >> joey was such an icon, such a figure of the punk movement that anything you can buy of joey ramones that represents the finest american voice of the punk rock movement. these glasses would make a great investment. >> what's the better buy right now, apple stock, treasuries, or joey ramones passport? >> punk rock memorabilia is a unique marketplace. unless its your passion and something you always wanted to have on your wall. i wouldn't tend to think of that as an investment vehicle. >> and if joey ramone's glasses don't rock your casbah, then maybe a guitar owned by the late clash frontman joe strummer will. so how do punk collectables stand up against the british invasion? can the sex pistols not just meet the beatles, but beat them? >> this is the stuff that is iconic to what the british
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invasion was to people who group up in the mid-60s. and its rarer. and its harder to come by. gregg greenberg, thestreet, for "n.b.r." >> susie: and finally tonight, we asked our facebook friends what they think about president obama's plan to raise the minimum wage to $9 an hour. we got a lot of responses, and strong opinions. nathanael says he earns less than that and would like the raise. but says he thinks many companies, would just cut hours, in order to avoid losing money. clint disagrees. he thinks more jobs will be created than lost, thanks to what he says is a fairer minimum wage. but philip says it will hurt job growth. he also says the market should determine pay, not the president. that's "nightly business report" for wednesday, february 13. have a great evening everyone, we'll see you online at: www.nbr.com and back here tomorrow night.
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captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org
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